Netflix, Discovery Ink Streaming Deal

By Paul Thomasch

NEW YORK (Reuters) - Netflix Inc and Discovery Communications Inc have reached an agreement to bring episodes of popular TV adventure shows including "Man vs. Wild" and "River Monsters" to the streaming service, according to people close to the deal.

The deal is the first major move by Discovery to make full episodes of its TV shows available for instant streaming, expanding well beyond the short clips that are now available on video sites such as Google Inc's YouTube

The two-year deal covers only material from prior seasons of the TV shows and is limited to Netflix subscribers in the United States, according to the sources. Discovery has an option for a third year.

Netflix officials could not be immediately reached for comment.

Financial terms of the agreement could not be learned.

Home to some of the biggest hits on cable TV, Discovery Communications' networks include Discovery, TLC and Animal Planet, ID: Investigation Discovery, Science and Military Channel. But Chief Executive David Zaslav has long shied away from making full episodes of Discovery's shows available on the web, saying it failed to make economic sense.

Instead, he has chosen to use the web largely as a promotional tool to draw new viewers to its programs, while concentrating on expanding the TV business overseas.

The deal with Netflix, however, allows Discovery to sell a big chunk of its programing library, rather than just one or two of its recent hits. None of the content from Oprah Winfrey's OWN Network -- in which Discovery has a 50 percent stake -- has been included, the sources said.

Under the deal, Netflix will also provide a search function that makes it possible for a customer to simply enter the words Discovery Communications into a search bar and get a list of all the available programs from TLC, Animal Planet or the other networks.

The agreement comes during a rough stretch for Netflix, which needs to add more content to its streaming service to keep drawing in new customers and fend off competition from the likes of Amazon.com, Google Inc and Apple Inc.

At the same time, Netflix has been under pressure from Hollywood studios and cable programmers to pay much more for content. Negotiations with Liberty Media's Starz were recently called off because the two sides could not reach an agreement on pricing terms.

Earlier this week, Chief Executive Reed Hastings announced new content would be coming soon, without naming possible partners.

Hastings also unveiled plans to further concentrate on its streaming service by splitting off its DVD-by-mail business, renaming it Qwikster. The decision, however, set off another round of complaints from customers already upset at price increases announced over the summer.

Netflix shares finished down 9 percent at $130.03 on Tuesday, and are down about 35 percent over the last month. Discovery shares are up about 10 percent over the same period.

(Reporting by Paul Thomasch; Editing by Bob Burgdorfer)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[bigkendallas]

04:29 PM on 09/26/2011

Netflix is forgetting how finiky subscribers are.

The reason for their success was the innovative "rent by mail" option that almost ran Blockbuster out of business.... but...
...they seem to be forgetting that noone is GUARANTEED customers.
Hey, I have 3 redbox machines within walking distance of my house.

And unless there is going to be alot of people demanding alot of episodes of "Kate plus 8" - the deal with Discovery still isn't enough, hech , my "On Demand" service from my Time Warner Cable has alot of Discovery programming anyway. Movie studios always want to make money off DVD sales (since this is where have of their money is made) don't expect alot of streaming new released movies.

Blockbuster could fight their way back by offering a combined streaming and rental service for $14.95 - and I would switch today.

[jdh48250]

11:17 PM on 09/22/2011

OK. How many subscribers has nutflix lost? I did subscribe to both but cut the DVD service. So do they consider that losing a subscriber? I cannot believe they still have 24 million people giving them money? I will leave the streaming in a couple of months if selection does not improve by 60%. My kids like watching the same movies over and over. I wished that worked for me!

[evilgoogleman]

07:53 PM on 09/22/2011

I believe this is the opening salvo of what netflix has been planning. They are not going to release their big "Ta Da" moves till this whole F8 facebook juggernaut starts to simmer down, they want the headlines to themselves. It's the only way this dumb qwikster move makes any sense at all. Meaning, they know something we don't.

After the initial anger at netflix recent dumb moves died down (price, horrible interface, qwikster) logic crept back into my head. The only reason to do the qwikster thing was it kill it, to kill their dvd branch, to put the final nail in the coffin of mailing discs and solidify streaming as the only game in town.

They really went about it all wrong for us, the costumers but maybe in their minds they feel they had to push the nuclear option and kill the dying media once and for all. I like the idea of making streaming the preferred delivery method, just hate the approach they took. They might have lost a great number of people forever (maybe even me) but they might be on their way to winning the war.

[writeon1]

06:57 PM on 09/22/2011

Since Netflix is so eager to push their stuff in foreign lands, let them go. A good loyal customer is hard to find and they have shown they could care less about U.S. customers. Hopefully they will learn what it feels like to be left behind.

[Patriot86]

01:22 PM on 09/22/2011

Are you kidding? Reality shite...that is supposed to replace Starz and the rest of the progarm lost to Net Flix...time to cut my losses.

[stoprollingover]

11:29 AM on 09/22/2011

Someone down below referred to Netflix's new DVD service as "Quickflix." I think that's a much better name than "Quikster" . . . or is it Quickster? or Qwickster? Or Qwikster? or Qwixter?

I give up.

[ChemLab]

01:58 AM on 09/22/2011

Band-aid anyone? To hell with Netflix. I'm done.

[Wilkby]

11:55 PM on 09/21/2011

How about some actual movies, instead of stuff I can watch on basic cable 24/7?

[E V]

10:59 PM on 09/21/2011

I might have been excited about this if Discovery and 90% of it's brands hadn't started sucking in the past decade. What does Kate Plus 8 have to do with TLC (THE LEARNING CHANNEL)?

And just for the record why does Nat. Geo feature nothing but shows on Nazis, Prison, and Cops? Since when is that National Geographics market.

[donidarko]

10:55 PM on 09/21/2011

This company seems to be taking its last breath.

[donidarko]

10:52 PM on 09/21/2011

I just wet myself with excitement...DISCOVERY programing...WOW!!!!!! I also dried myself awfully quickly....DISCOVERY programing.....Yawn.........big deal!

[Michael Legnon]

09:21 PM on 09/21/2011

Netflix WAS great a few years ago...think I'll cancell my subscritption tonight.

[E V]

10:57 PM on 09/21/2011

"Netflix WAS great a few years ago" Sort of like the Discover Channel...so it's a perfect fit.

[ILoveGreatDanes]

08:09 PM on 09/21/2011

Color me unimpressed. I would have been a lot more satisfied if the company hadn't treated us like dog doo doo on the bottom of their shoe.

[alone ranger]

09:05 PM on 09/21/2011

I"m done with Netflix.............they really dont offer much for their price

[cqtestk4xs]

07:18 PM on 09/21/2011

That's nice, but I don't want to watch a bunch of old Discovery stuff. I subscribed to netflix for movies. No movies, no subscription here. Typical business screwup here...you have something good and then you change it to be "something better". It wasn't broken, now it is. Nice going!

[moguns]

06:26 PM on 09/21/2011

this may sound stupid, but these 2 programs that are listed at the top of the article, they are currently being shown in the discovery channel and there is another channel I have seem then listed like TBS or TNT or NATGO I am not sure wihich channels...
but would anybody PAY to stream these 2 shows when they are on TV for FREE????

[Conrad Wesley Clough]

08:44 PM on 09/21/2011

Not everybody that subscribes to netflix subscribes to cable, and cable TV is certainly not "free", where I live comcasts BASIC service costs about 3 times what I pay for my netflix subscription.